Reduce Tech Mahindra; target of Rs 1250: ICICI Securities

ICICI Securities recommended reduce rating on Tech Mahindra with a target price of Rs 1250 in its research report dated April 25, 2025.

Broker Research

April 25, 2025 / 22:03 IST

Reduce

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securities research report on Tech Mahindra

TechM’s turnaround efforts are yielding results with its BFSI portfolio strengthening, large logo additions, a stronger deal TCV run-rate and improvement in margins. Strong new deal TCV growth of 42.6% YoY provides some comfort on FY26 growth outlook. However, the tough macro environment may delay ramp-up of existing deals and elongate the pipeline of TCV conversion cycles. Its two largest verticals – communication and manufacturing (~50% of revenue) – are impacted by industry-specific headwinds and weak macro. TechM also saw a delay in renewal of a BPS deal by a US hi-tech client in Q4FY25. We tweak our estimates to factor in the said challenges.

Outlook

We continue to value TechM at 18x on Q4FY26E– Q3FY27E EPS of INR 69; TP revised to INR 1,250. Retain REDUCE as tough macro could slow the pace of turnaround.

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